Doing Real Estate On Your Own Terms With Chris Prefontaine
Episode 336: Doing Real Estate On Your Own Terms With Chris Prefontaine
Just because the real estate business is an unpredictable industry does not mean that your income is too. Telling you that you can do real estate on your own terms without being at the mercy of the ever-changing market is the founder and CEO of Smart Real Estate Coach, Chris Prefontaine. He shares with us his recession-proof strategy on how you can navigate the real estate world fresh from his bestselling book, Real Estate On Your Own Terms. Chris then tells us about some of his programs while also touching on his own twist on owner financing, sales strategy, hiring virtual assistants, and more!
I’ve got Chris Prefontaine on and he’s up there in Newport, Rhode Island. He’s got the office that he got on terms by the way. Sometimes people go, “You and Chris Prefontaine do the same thing. Aren’t you competitors?” I say, “He’s in Rhode Island and I’m in Texas and even if he was in Texas and I was in Texas, it’s still a big state. There’s a lot to be done and to tell you the truth, we learn more from each other than we’d take from each other.” I was happy to have him on the show and dispel that belief. Somehow, we’re in the same space but even though it’s different in your area, it’s different in a lot of areas, it’s different in my area. How are you doing, Chris?
I’m doing great. Thanks for having me back on. It’s always great to chat with you and it’s been a while. We aren’t different. We totally operate differently as far as how we buy, but that’s cool that they thought that.
There are not a whole lot of people though that does what we do across the country. It is specialized. It’s a house-buying season.
It’s harvest time.
You have a little twist on owner financing. You’re doing your owner financing with a lease to buy model or lease option. Is that what you’d call it?
We buy lease purchase or owner financing from the owners. There are a few exceptions but we only do it with free and clean homes and we pay principal-only payments. On the backend, we do rent to owns.
You specialize in buying your house with seller financing. You’re getting the seller to finance you. Does that happen all the time? Part of the time? Not very much? How often do you get the seller to finance your acquisition?
I will tell you roughly speaking out of 100 deals, 50 will be lease purchased, 25 to 30 owner financing and the balance sub-to. Those are the three ways we do it, but we are getting pickier and pickier in targeting the free and clear and getting great longer terms you only buy.
That’s amazing because I wouldn’t have guessed that the answer would have been that high. 50% of them you’re getting the owner to finance. Tell us how that’s possible. How are you talking to these people?
These people are free and clear. They presumably don’t “need the money.” They would have already pulled it out. That’s my philosophy on it. Depending on what market you’re in, you’ve got as much as a third. I heard in Naples, Florida, this woman told me it’s 50% something are free and clear. That’s huge. It’s a big pond to fish in. They’re pleasant to deal with because they’re financially savvy and/or set up well and they want their price. This guy from my building said, “I don’t want to be paid out. I’m not putting a due on sale but I don’t want to be paid out. I want to take this over time as long as I get my price.” If they say I can make principle-only payments and I can do that for five or ten years and they want a measly $10,000, $20,000 more and I can lose that and, in a few payments, that’s phenomenal. Think about the paydown in any economy.
Using the low or the no interest rate model to go ahead and be able to give them the term they want. You can pay someone $1 million for a house that’s only worth $100,000 if you get the right terms. People go, “How do you do that?” I say, “It’s easy. This house is only worth $100,000. You’re going to pay a guy $1 million for it. You don’t have to make your first payment for 30 years and you’ll be dead.” How are you digging up these houses? How do you keep your inventory up?
We fish in the expired pond still, the expired listings for rent by owners. It’s been a good one and a lot of the markets we operate in, and then for sale by owner. We will target the free and clear. I love the free and clear and out of state owners. I’m not a big advocate for spending a ton of money on mailings. I know a lot of the wholesale is they spend tens of thousands and I don’t do that. I don’t think it’s necessary. When I say send mailings and target, I’m talking one of our students does 100 postcards at a time. It’s not a big expense. It targets absentee owners, out of state, or free and clear. Those four sources in most markets are more than enough to keep any solopreneur busy.
We quit sending up the mail too because the trend was don’t mail them anymore, call them. If they’re lukewarm, then start mailing them stuff. Let’s find someone who answers the phone and at least is a prospect. We do send out 10,000 postcards from time to time, not because postcards work that well that people call us to sell us their house. If they do, that’s a bonus. We’re looking for the return postcards. Out of 10,000, we’ll get about 200 to 300 return postcards and now we’re going to work.
You’re saying those are more like the abandoned or absentee or whatever?When you work with family, set a culture. Values to help make decisions. Click To Tweet
I’m saying absentee houses, you can still mail a postcard to the taxpayer of record and he’ll still get it and he’ll get everybody else’s postcard. When you mail out 10,000 postcards and 300 of them don’t get your postcard, they didn’t get anybody else’s postcard either. I’m looking for that guy. Where is he? He wasn’t where he was supposed to be on the tax records. He’s not there anymore. The hunt is on. I figure if I can get in the room with that guy, there’s no one else in the room.
That’s similar to when I call someone and they’re a total jerk and you know they’re chasing everyone off, especially the timid people. I say, “Great.” You call him back a month later. They pretty much have forgotten that they were a jerk. It’s always the case and then everybody else is gone.
Stay with the difficulties because they’re not always difficult. That reminds me that even when someone runs me off their property because they’re offended with my price and it’s happened from time to time, I still mail them a physical contract. Six months later you get a call and they want to buy it and you’re remembering, “This is the guy that ran me off the front lawn screaming and cursing at me.” I ask him, “Why me, sir? Why did you sell the house for me?” He says, “You’re the only guy that took the time to send a real contract. I’ve been sitting on my RMLO for the last six months. I’ve finally had enough.”
God forbid something happens to them and you get a call from the family. We’ve had that happen two and three years later.
What’s the longest you’ve ever bought a house from a mailing?
I think three. One of my guys in DC said he got one back about under 3, 2.5 years. When I said I got it back, someone called them.
We bought one five years after the postcard went out and they had it in a folder waiting for an event to happen and the event finally happened.
That begs the discussion of people who get in. You and I had been at this for a while now but people who get in and they only watch late-night TV and they want to make $1 million overnight. They quit after 90 days or 120 days or even two years. I tell people 36 months the blind is on. I don’t know about you.
I’m a little bit shorter than that but we have interns now at our office. We started interns from out of the city. People that want to come in from out of state or out of the city and be our interns and we tell them two years minimum. We put them on some little stipends so they can fill up their gas tank for about six months, and then they get on their own. They’re not doing a regular split. They’re making an intern split. They’re learning what we do and then we tell them but if you’re not going to hang out for two years or you’re not going to make it two years, don’t even show up because it’s not going to work.
I agree. We started doing the same thing by the way. One happened by accident. One sent us a resume. We had him come to the program. He’s doing a great job. One saw our office and popped in. We have other students that go find them and go to the colleges. It’s a great program.
There’s a lot of money in the trades and sometimes for a lot of people, college is overrated. They shouldn’t be in college and how many people do we know that have a college degree that is not using their degree. There’s more to college than the degree. If you do it the way you’re supposed to do it, you make lifelong friends and you can make connections that are big and bold and it can get you to some things or get you to certain places. Other than that, I look at this as a trade. Air conditioning and heating and learning how to buy an asset and make it cashflow.
My son did that. I don’t know if you remember but he had a snowboarding injury when he was in middle school. He was in a coma and came out of that phenomenally but then decided, “I don’t want to go to college. I want to work with you.” My wife and I said, “Okay, if you want to.” We put him on training, all the mentors that I go with and all the stuff we’re doing and he’s kicking butt.
Tell us about your strategy on the sales side. How’s that working?
Up until 2018, we’re doing 100% rent to own and we would get them, and we still do, pre-qualified with a mortgage-ready plan. It might be 18 months, 15 months, 20 months, whatever that is. As long as that fit within our term with our seller or was earlier preferably and they had down payment and encounter with and to support it. As long as it passes the smell test, we’d put them in a home. 2% to 5% or 6% that have life events don’t cash out the rest do because we’re super picky at the front end. Now we’ve started to do some of them that we own longer term, we’ve started to advertise owner financing and picking away at that with the buyers. Most of them in my portfolio are rent to own.
You’re looking for cash out within some period of time.
Our model definitely has it cashing out.
What volume are you doing these days?
We still do on our own 2 to 4 a month. In the three-state area we work in, myself, my son-in-law and my son, those two run it now. Around the country, if you add up all the deals, we partner with students around 12 to 15 at least a month that we go through.
Is there a way to tie a budget to that? I was listening. It’s convoluted from the educational side to the house flipping side.
If you’re going to hire a VA to do some of your calls, you should. That’s the biggest expense outside of adding a website. Anyone’s overhead, solopreneur, getting started, getting it up to about a deal a month or deal every 1.5 months, you’re going to spend about $560 a month. That does not count your website. That counts your phone, your VA and some light admin to get some lead generation from a service. You can run a business for about $1,000 a month with all three of our paydays that could potentially hit you in the $75,000. That’s our average, $75,000 a deal. That’s not too shabby. I don’t give or take if six or eight or ten months to get there.
Are you training your own VAs?
We are now. It got frustrating. We have a group of VAs that we control and/or paid by us to then do our own stuff and then do some stuff for people we work with around the country so that we can control it and control the quality.
Sometimes it’s hard to find that right VA but once you find the right ones, life gets a lot easier.
We do have weekly meetings with my son-in-law and he calls it the VA training meetings but it’s like accountability/training/keeping them plugged in. They only work for you.
Definitely, you have to keep them plugged in because if you give them something to do and you never talk to them, they drift off.
I was talking to this guy, I said, “I got your weekly sheet. It’s got three leads on it. You can’t survive on that, Peter.” He said, “I’ve got to give him a call.” I said, “They work for you, you’ve got to give him a call. They should be doing ten or twelve a week.” You’ve got to stay on them.
At my members-only website, there’s a poem that they read. I don’t remember the name of it. It’s a difficult poem and it’s called English is Hard. They read this poem on a Zoom video or Skype so that we can see them and listen to them. That’s how we size up their English. You can pay anywhere from $2 to $3 an hour for these guys. If they speak good English and they have made some sales before and they’re good, what are you paying them about $5 or more?The absentee owners, out of state, and the free and clear in most markets are more than enough to keep any solopreneur busy. Click To Tweet
No, we pay more. We have a guy in the US that I’ve had for a few years, we pay him $12. He has done tens of thousands of calls for us and he logs it. He works 65 hours a week. It’s not just us, it’s some of our people too. That’s a lot of hours per week. We have some in the Philippines that one we pay $9 and he runs the other ones that we pay $7.
It’s fun to bonus those guys because a little bit goes a long way with them. If they hit a strike or they do something or it’s Christmas, $100 goes a long way with the VA in the Philippines, which is a fantastic dynamic. It’s good for them. It’s good for us. The only thing I don’t like about it is if they start working for other people on the side and they’re not telling me. I get them to sign an exclusive agreement with me. Not that I can do a whole lot about it, but at least I formalize my expectations or the expectations of the company.
What we do is $50 on all these guys, if they get us what we call a take and you have a contract signed. When we sell that property, we bonus them $250 and as you alluded to, that’s pretty major for them.
$50 and $250, all the way around when they get a deal to get an extra $300 bonus.
When we get that sold, they got a $300 bonus.
That’s a lot of money there. I’ve been afraid sometimes because I’m a nice guy. I like people to be part of the team and everything. I was thinking about giving a guy a $500 or $1,000 Christmas bonus for the year but you get to worry that they may not come to work for six months.
I was going to say at least 3 to 6 months. That’s true.
It’s that much money to them. You’ve got to be careful. The key is to any culture in any office, make them feel like they belong and take care of them right. Treat them more than fair. It doesn’t take a tremendous amount for them to get ahead in that country.
It’s good to see. We’ve had this one girl and she started when I started the podcast. You probably remember those days. We flew her up to our last event. She’s been with us for a couple of years and she’s an integral part of the team now. She’s not a prospector. She does admin for my son and son-in-law.
In my office, this is how we did it. I’d like to see how you compare to your office. I have four acquisition guys. One of them is the manager. He ran a telephone outbound calling collections for credit card companies, the people that buy this bad credit card debt and then talk to people into paying off something that was written off a long time. It’ the hardest job in the world, I would think. He was good at it and he asked, “Can he set up a phone room?” We said, “Yes, we’ll support you. We haven’t done it before ourselves.” He says he knew how to do it. The thing was the acquisition managers, they all have their own lane. If someone’s working pre-foreclosures, no one else is working that list. If someone’s working the tax, unless you cut it in half like some of these lists are so big, you can cut them in half and some would get half like realtors.
We’re not competing against ourselves with anybody. Everybody should have original clients and not overlap. It does happen sometimes but not a lot. They go about their business and the VAs are there to support them. The VAs will call out 200 people a day. They read a small script but they’re trying to find A, are you the owner of this house? B, do you want to talk about it? At that point, they turn them over to a closer. My VAs are not trying to close anybody on anything. They’re trying to save him there. I find they don’t understand business the way we do.
I overheard Zach coaching up the team on his Monday morning call. I heard him say, “Tell me what you’re getting for them to ask you what you’re doing to the house?” He drills into this script but still all he wants him to do is stop after they gather the information from him. That’s all.
We had a VA and I said, “How are they doing?” He says, “They don’t get it sometimes. I have to check in with them all the time to see what’s going on.” I said, “How many people did you call?” He says, “This many.” “Is there anybody interesting?” He says, “No.” “Nobody had a house for sale?” “There was a guy that had a house for sale, but it wasn’t the one I was calling on.” It was like, “He had a different house he wanted to sell?” What does your office look like?
For the buying and selling entity, it’s Zach but he’s also juggling deals with students. Zach and my son, Nick does the buyer side. They have a couple of interns they’re working with. They have VAs at this point too that they utilize for us. It’s pretty simple. There’s one girl, Sue that runs the admin, shows up, helps them out and supports Nick.
Is everybody paid upon the success of deals? For example, Sue, is she salaried?
She’s salaried with a bonus. The VAs are hourly with a bonus.
It’s the same here pretty much, but all my acquisition people, all my salespeople are success-only.
That’s our family. It’s a little bit easy even but since day one, it’s been like that with the buying, selling and coaching. We’re transactionals. When we win, we win together.
Has it been difficult to work with family?
No, it’s been great. I’ve been on podcasts that are for family businesses. The fact is when we started, I owe a lot to this company we belong to that helps people scale their businesses. We’ve set up culture, we’ve set up a value system so that when decisions are made, it’s not a personality or a family thing. It goes by the values. If it fits within the values and the mission, we do it. If it doesn’t, we don’t. You don’t get much pull back from anyone, let alone a family.
You’re giving away a book called Real Estate on Your Terms: Create Continuous Cash Flow Now, Without Using Your Cash or Credit. Tell us about your book.
It’s our system from A to Z but it starts with my story with the ‘08 crash. I’m an open book and blunt. We’re from New England so we’re super blunt. I lay it all out, what mistakes are made and why we changed the terms and then I go through the nine steps you need to go through from what you and I were talking about behind the scenes with lead gen all the way through to cash it out. It’s an A through Z book. I tell people, don’t think you’re going to read it and go make $1 million, but do think you can read it and start piecing things together and see if it’s for you. That’s why we give away for free instead of buying it on Amazon.
You can go to 1000houses.com/onyourterms and get a free hard copy, which they’re going to even pay for the shipping. That’s above and beyond the call of duty. Thank you very much, Chris, for offering this.
I get annoyed when I’m online or I’m on something they say, “Get my free book,” and you click it and you’ve got to pay $8 or $10 for shipping. We’ll ship it.
I wrote a couple of books on my time. Writing books was some of the hardest stuff I’ve ever done. How did you feel about writing your book?
It’s daunting to think of it. I did it on a weekly basis. I would set a time slot that works for me, chucking it down, I’m about to do a revision on one of them. I’m like, “I’ve got to do a weekly thing and tackle the chapter.” Other than that, it seems daunting, but it’s not that bad.
Do you find we’re in a different place in the economic cycle here with houses these days? I don’t know how it is where you’re at, but everybody in the world was a house flipper down here for the last few years. There wasn’t a person you didn’t talk to that didn’t seem like they were flipping a house.If you're going to hire a VA to do some of your calls, you should. Click To Tweet
That’s still happening because of the TV shows, but everyone realizes that the profits are tight because of that. They’re tight plus the pricing. That’s why I love the niche that you and I are in. We both do it differently but it’s a standalone niche. If you and I knew the answer to the economy, we wouldn’t be on the show. We would be on Cayman Islands somewhere chilling out. Who knows? If you’re doing this stuff on terms, I seriously don’t care what the market does. I just need to keep bopping and pivoting with it. That’s all. If I get long enough terms, I definitely don’t care.
Let’s talk about why these strategies. I’ve long times said that if there’s such a thing as a recession-proof strategy, I may be in one of those strategies. Mine is similar to yours. Let’s talk about why your strategy is recession-proof or possibly recession-proof.
There are a couple of things. One of them is a general thought and I’ll go specific and that is what I alluded to. If I go long enough out on terms and/or have an agreement that allows me to pivot with the owner at some point, if I need to because of the economy, then I’m okay. This building is twenty years, not that I’m going to resell this. It wasn’t bought for that reason. If I was, I don’t care. In twenty years, I might go through a cycle of two but I’ll be okay. If you’re using the right agreements quite frankly, even on the early purchase, we have the option to assign it back to the seller if we want and they don’t want it back. It’s a nice little thing to have in there. You extend it, worst case.
I went through this thing but I’m buying houses for $50,000 using OPM or Other People’s Money. It didn’t happen overnight but I have like $20 million of 8% interest-only five-year money. I’ve changed that now. Since I have so much of that money, I started to talk to people about 10 to 15-year fully-amortized money. The point is it’s a non-recourse collateral-only loan, payable monthly and wrappable, which means I can sell the house on terms and not have to pay it off. To believe in our business, you’ve got to believe in two things from head to toe. You have to believe that a person paying $1,200 or $1,300 a month rent would rather pay that to own. If you don’t believe that, then this doesn’t work.
It’s not every single person, but it’s a large portion of a large number of people. The other thing is that banks will stop loaning money in the recession if you believe that. When the recession comes, we’re the only ones open because we’re using other people’s money to buy houses and then our buyers don’t need a bank to get into our house. That’s why it booms in the recession because everybody else is on the sidelines now because one end or the other needed a bank or a mortgage company. That all dries up in a recession.
The last recession was described as the great recession so it wasn’t a mild recession. We’ve got to see our businesses during that time and we know what happened. I was fortunate enough to be and it’s nothing that I did on purpose. I happened to be in the right strategy when it hit and learned that it could survive a recession. A lot of people were in the strategies that couldn’t stand that recession. They learned that too. How do you function knowing that there’s always another recession coming? There’s always another one coming. It’s always on its way. How do you function now preparing for the next recession or waiting for the next recession?
The only thing we did differently in the last couple of years with the mindset of it’s pulling back and it’s going to continue to perhaps is longer-terms in owner financing are subject to more emphasis versus at lease purchase that has a ticker on it. You do have to go back and renegotiate. I’d rather not be in the long-term. What’s encouraging, Mitch, you might know the stat better and I don’t remember where it was. I was reading it at home. It’s like a year ago, but it gave a stat that said in the ‘90s, the amount of owner financing in terms, the least purchase I mentioned, was small, 2% of all the real estate transactions. It predicted it to be somewhere around 12% or 13% and heading towards 20%. That’s encouraging for us as the banks screw up.
The owner financing showed its head in the great recession because the banks had all failed and people had farms and stuff and they needed to move or they wanted to move or they’re being forced out or whatever. They had this asset but no one could get a loan and no one had any cash. People started owner financing and things. We saw it again in the Carter years when interest rates got to be 18%. That was a lot more owner financing going on them because people couldn’t qualify for loans at 18% interest. When I first started talking about owner financing in teaching, there wasn’t anybody I could find that had that strategy going full-on. I didn’t invent it. It was being overlooked big time. For whatever reason, I got into some houses that I had to sell and I had to stop some bleeding. That’s how I stopped it. It was by owner financing my way out of it. The longer I hung around the strategy, the more I liked it. I thought, “Why am I doing anything else?” Tell us a little bit about your program, how it works, what you teach and what people can expect?
I’ve got a bunch of free stuff because that’s why you and I give away the book. You and I both on the same opinion that our niche is not the only niche. Once you do some free research and you find out, “I can run with that.” We do have an online platform. It’s loaded with 60 videos. It’s 90-some pieces to this online platform and they own it for life. I used to have it where they had to pay monthly. It’s a one-time cost and then they own it. We’re going through one module out of the ten every month. We cycle every year. It’s like a living and breathing thing. If we say, “We’ve got to change our agreements because we learned this. This strategy changed a little bit, we’ve got to tweak it.” It gets updated so it doesn’t get outdated sitting on the shelf. It’s pretty cool.
People chime in and watch a video every month.
No, it’s not every month. They get the whole kit and caboodle right up-front, ten modules with all kinds of audio and video in it as we update it. Let’s say you completed module two, it says you’re 100% complete. Next time you get on and it says 40%. Why? We updated it. You’ll know that that stuff got updated in there. People will say, “Do you give us who you work with and the vendors?” Yes, it’s all there, A through Z. That’s what we do. We lay it out.
Do you want to discuss price or do you want to hold? Because I know prices can change and everything. We could do a disclaimer and say this is nowadays’ price, subject to change, whenever we want.
We priced it under $1,000. It’s $997. I had one person in the industry trying to say to me, “What are you thinking about? You could comment on the three different courses and you could market this for $5,000. He had me to pay $14,000.” I said, “Okay, great. Our philosophy is go do deals. We like people doing deals with us. If that’s the case, get them in and get them trained.” That’s how we did it.
That’s a big part of your back end that you’re partnering with your students and the money’s in the deal.
If they want to. We have a major mission for the company, but part of that is to help them do transactions.
Do you want to discuss that major mission?
It’s 1,500 transactions by 2022. We make decisions based on that. We accept people in our program based on that. We say no to people, Mitch. Some mentors think I’m nuts but we said no to three different people to come in and partner with us. It’s got to be a fit for the values and the mission. If it is great, it’s a win-win. If not, there’s no sense of dancing.
You have to say no to some people because there’s no way in hell that everybody fits in any one program. You’d be doing a disservice to both people yourself and the person if you don’t say no. I have a 45-minute conversation with my people before I let them part with their money on a higher level. It’s a lot of money. The other thing is it’s no fun if I’m sitting there trying to coach somebody who I know is not going to get it or it’s not in the right market or whatever the reason is. It’s not all about the money. You’ve got to have a relationship and we’ve got to be able to win.
A lot goes on in a deal. You’ve got to be comfortable with this person and it’s got to be a win-win.
If you stay winning, things will take care of itself. How long does it take to get through your course, generally?
People can blow through in a weekend if they want. They can take a month or a week and digest that. I tell him to blow through it once. You’re going to be in a different mindset even a few months from now, let alone now versus a year from now. Go through it again in detail. They use it as a resource center, meaning, “I got my first buyer. What module was that that helps out? Mod six. I’ll go back to mod six and figure out how to get this baby sold now,” even though they already watched it. It’s a good resource center too because it has everything in it.
You read it once and get the 10,000-foot view. Don’t stress out over anything. Get the 10,000-foot view looking down and then go grab things as we call just in time learning. I don’t want this house and now I’ve got to fix it. Where’s the rehab section? You go over there and you start studying that. This one I’m going to do later. Do you ever have this happen? People start asking you about things way out there like, “How do I sell a note?” I say, “I know how to sell a note. I can tell you how to sell a note. Let’s worry about getting a note to sell first and then we’ll worry about that.”
All the time. On Slack, one of the students said, “Got this contract. What does this number 34 clause mean on this slot?” I said, “You don’t even have a property yet. Go call people and then we’ll talk about what it means to put a contract together.”
Someone said the term just in time learning and I kept it. It was a good point. Where are you buying deals at? What part of the country?
We operate with our family in Rhode Island, Massachusetts and Connecticut primarily. We’ve got what we call associates. They’re those students, there are 60-some odd of those. They’re all over the country, a couple in Canada and the rest of the US.
Do you find it difficult to deal with different laws and different states? That’s a lot to take on.
They do the deal. We’re a consultant. They will have their own attorney and make sure that everything’s okay on there. I can’t keep up with that stuff. I would go nuts.
How do you make sure you get paid? They’re in the middle of the deal. How do you solidify your position from afar?Say no to people because if they fit with your values and mission, then it will be a win-win. Click To Tweet
There’s a lot of gentleman’s agreement there, Mitch. We’ve got an agreement with them, but what’s the reality is they don’t want to be part of what we call the wicked smart community. If they want to be part of the wicked smart community anymore and they took off, “They take off, they lose. It’s a great community.” If they stick around, they’ve got that tied to us and if they need our help, we’re going to know they’re doing deals. If they go off and do them on their own, we’d never know, so be it. I come from a prosperity mindset. If they’re in our community and having fun to make them money, they’re doing deals with us.
We used to do deals with anyone in San Antonio that would bring a deal $0.50 on the dollar. That was our deal. We put up the money and we do the deal. We put up all the money. The deal was 100% in our name and they were a handshake. Some people weren’t comfortable with that. I said, “There’s no way I’m putting up 100% of the money on a deal and then have to ask your permission on what to do with it if things get tough.” I’ve got to do what I’ve got to do but here’s the deal. I mess you around one time and you’re gone forever. You probably will go tell other people too. It’s been the opposite. I’ve paid when I didn’t think I deserve to pay or they didn’t deserve as much as they were getting but to keep the reputation and the peace and not burn a bridge, settle up with that one deal. I don’t like it but I keep my mouth shut. I take it like a man and then I don’t have to do any more deals with those people, but I don’t burn the bridges. I make sure that people are not walking around town saying anything that I don’t want them to say. One way to do that is sometimes you’ve got to pay when it’s not fair to you. We paid a lot for these reputations. What do you think?
It’s everything though. One of our five values is conducting all transactions with the highest integrity. That’s one of five. It’s super important.
What some of your advice to the newbies out there? Is there anything I’ve missed, left out or that you wanted to talk about, please now is the time to chime in. What do you say to the guy out there who’s sick of his 9 to 5 and is looking for a life change but doesn’t know what to do?
This goes for real estate and non-real estate, so this is an easy one. Whether it’s what you and I do or opening a hot dog stand, it doesn’t matter, especially if it’s a good job. Find a niche that you like. Real estate or not but within real estate, pick something you like. There’s a whole bunch of sub-niches and niches. Then pick someone i.e. like us that are in the trenches doing deals and have gone through at least one cycle and it’s where you want to be. Here’s the hard part. Go do what they say. You said two years. I said the three years, go do it for two or three years with blinders on, don’t look back. Don’t look left, don’t look right, don’t doubt yourself. It’s not easy. Do that for those two or three years. I can guarantee you’ll have a phenomenal experience. What does that all mean? You’ve got to set your expectations. That’s the hardest thing, I think. We say to people, “What does it look like in a year if you were to come on board with us?” If they give us some way out in the sky expectation, we go, “We’ve got to get that into check or we’re going to have a headache.” That’s how I would tell anyone, go find someone like that and then follow them for three years. You won’t need three years. I like people who say, “I’m going to do this.”
If you’re prepared for three years, then you won’t be disappointed.
You’d kill it in a year.
That’s the same idea I have. Let’s set the expectation out there. If you exceed it, good for you.
Versus the late-night commercial that says they’ll make a million next month, you just flip a few deals.
I bought all those, that’s how I got started.
I did too when I was younger.
Who was the one I bought? I can’t remember the name.
It’s got to be Calvin Sheets.
Even before them, Dave Del Dotto and Jimmy Napier. The old-timers, Jack Miller.
I still hear his name.
Jack Miller was incognito and was insulation-conscious that we’re not even sure his name is Jack Miller. As a matter of fact, I’m sure his name was not Jack Miller. I even talked to someone who took on his torch after he passed away and I said, “His name wasn’t Jack Miller, was it?” To look on her face, let her know that I knew, but she wasn’t going to tell me. His name wasn’t Jack Miller. Get a free copy of your Real Estate On Your Terms book. It’s a hard copy and he’s going to pay to mail it to you. What a great guy. Give this guy some good reviews on Amazon or something because he’s giving you a free book. I don’t even have to read the whole thing myself to know that it’s worthy. I’ve talked to Chris long enough to know that if you put something out, you’re going to get something out of it. You won’t be wasting your time on that. Generally all of us, including you, Chris, can read something from someone else and pick up at least one nugget that’s way worth it, right?
Absolutely, sometimes you might get bored with it but you’ll get something out of it if you’re looking for that something. I’ve got to get 30 things out of this or it’s no good.
You’ve been in the business twenty-something years and done 1,000 or 2,000 houses. It’s a little harder to find a nugget than it was the first day you walked in off the street. Do you remember when you’d go into these seminars or weekend boot camps or whatever and come out bursting?
Yes. Now, you’ve got to sit down for a couple of days and try to grab a nugget a day.
The other thing about those is you’re learning as much from the community that was there that you did like some of the people on the stage or sometimes more because they will tell you a little more about the truth about what happens or what to expect.
No question. I was at a mastermind, it was a fourth of four that I had. I was sitting on the back of a chair with this gentleman and he said, “Have you done this?” He gave me this one little nugget that was worth all four trips to that mastermind.
One of the greatest little 2.5-day boot camp that I ever went to was Mid-Ohio Securities at the time. Dick Desich turned out to be Equity Trust Company a long time ago. I paid $3,000 to get on a plane and then I had to pay for my hotel right down there by the Fisherman’s Wharf in downtown San Francisco, which was $200 or $300 a night. The food down there wasn’t cheap. This thing ends up costing me $4,000 to $5,000. I had a big barbell back then all the time. That weekend changed my entire life. I remember walking out on Saturday at 2:00 and there was a meet and greet on Friday evening. That was nothing, just a meet and greet. We got in at 8:00, by 2:00 I was walking out of there and it wasn’t over until Sunday.
I said to myself, “I’ve had more revelations than I can stand. I know exactly what I’m going to go do. I don’t want it anymore. I don’t want to get watered down. I’m completely focused. I have it 100% right here in my heart, exactly what I need to do and I don’t need anything else. I don’t want to be confused or overloaded anymore.” I didn’t go back to the other 1.5 days. Some people would call me stupid. I went out the next Sunday and watched the street vendors and relaxed. I went home and I kicked ass with that one thing I got. I always knew I could go back and get the rest of it later but I didn’t want to dilute myself. Sometimes when you have one good idea, you need to finish strong with that one idea. Don’t worry about anything else.
That’s action packed if you look far.
The coolest thing about mentors in the masterminds and being around people like Chris to me is when you sense that growth that you’re growing, you can feel yourself growing. Some of the greatest times in my life were when I had that feeling like weeks on end. “I’m learning the stuff that I’m getting.” They didn’t teach me on for school for some reason but I’m getting it now and this is what’s making the difference between who I was and those other guys I see up there in the high rise buildings with the nice suits and the $40,000 watches. This is what they know that I didn’t know.
You can get that to your point all the time if you hang around with the right group, community or person.
That’s exactly what I was saying in the mentor group. I got stuck. There’s always another level and there’s always another level of people in the room that you need to be with. You’re at one level with certain kinds of people or certain people doing a certain thing. You get in another room with the high-level people that are doing something a little different or an add on to that or a tax strategist because you don’t need a tax strategist right now, you’re broke. When you start making $2 million, $3 million a year, you’re going to have to go spend some money and get the room with the kings of that stuff because they’ll save you a fortune. I went to a group called Collective Genius to figure out how to run my business and not have to be in my business. I tried many times, I failed. That was about a $30,000 check by the time it was all said and done. It was the best money I ever spent because I was in the room, and you said something important. Get with someone who’s done it and something I hadn’t heard before, make sure they’ve been through at least one down cycle.
I’ll add one for you. Make sure the person that you’re with that you choose is the person you want to be on and off the field. Whatever it is they do, when they’re not working, make sure that you’re lined up with all that. I want to take this time to put that link out one more time, 1000houses.com/onyourterms. Get the free hard copy, Real Estate On Your Terms. He’s going to mail it to you. Learn how to create continuous cashflow now without using any of your cash or your credit. It can be done. I promise you it can be. I’m living proof of myself. I want to thank the audience for stopping by to get you some Chris Prefontaine. Chris, is there anything you want to add before we jump off here?
No, that’ll do it. I don’t want to water down anything we talked about. It was a pleasure.
Get over there. If you want to learn more about the courses of the boot camps or whatever it is that Chris offers and he has a lot and even more of that free stuff, get over to 1000houses.com/onyourterms. You can find everything you want to. We’re into delivering the content right here. You think you want to know more, maybe buy something or get some further education, go over there and get that done. It’s a pleasure talking to you. Thank you so much.
Same here, Mitch.
Do you have a podcast?
See you later, Chris.
About Chris Prefontaine
Chris is the best-selling author of Real Estate on Your Terms: Create Continuous Cash Flow Now, Without Using Your Cash or Credit. He’s also the founder of SmartRealEstateCoach.com and the Smart Real Estate Coach Podcast. Chris has been in real estate for over 25 years. His experience includes the construction of over 100 single-family and duplex homes (mostly 1990s and selectively to date), has owned a Realty Executives Franchise (Massachusetts 1994-2000) as broker/owner which maintained high per-agent standards and eventually sold to Coldwell Banker in 2000. The 2000s included coaching ½ million and higher REALTORs® in order to scale & automate their business throughout the US and Canada.
He also participated (and still does selectively) in doing condo conversions (multi-family homes to condos) and “raise the roof” projects (converting single-family ranches to colonials in growth neighborhoods). Chris has been a big advocate of constant education and participates regularly in high-end mastermind groups, as well as consults with private mentors. He runs his own buying and selling businesses with his family team, which buys 2-5 properties monthly, so they’re in the trenches every single week. They also help clients do the same thing around the country. Chris and his family team have done over 80 million in real estate transactions. They mentor, coach, consult, and actually partner with students around the country (by application only) to do exactly what they do.